From: Greg Smith (SFPalladin@aol.com)
Date: Sat, 21 Apr 2007
Subject: JRL 2007-#92/ NGO Currency Importation
Having been involved with Russian - American NGO's work since the mid 1980's, I was chagrined to read the report in JRL 2007-#92 about the investigation of the Educated Media Foundation resulting from their staff failing to declare over-limit cash in customs.
Elements within the Russian Government suspect that certain western NGO's are fronting for intelligence operations, or have an agenda to foment a "color revolution". Given this situation, and considering that much of our work is dedicated to promoting rule of law, those evading Russian customs regulations do an immense disservice to the cause of building Russian civil society.
Western commercial and non-commercial organizations often operate in cash because , especially in smaller, more remote communities, service providers will not accept more conventional forms of payments such as wire transfers or credit cards. Moreover, I've heard NGO leaders explain that they bring in undeclared cash because their Russian partners are fearful that they will be identified as the end recipient and they will be taxed, or, that somehow, criminals will know they possess large amounts of hard currency and rob them.
Yes - the Russian tax system is regressive and even confiscatory, and yes, crime and corruption are rampant. However, arrogantly taking the law into one's own hands and ignoring declaration requirements is not the answer. Indeed, these declaration limits are pretty much universal and, in fact mirror U.S. Law in this matter. See for example http://usembassy.state.gov/fukuoka/wwwhcustoms.html#10is.
Press reports indicate that the individuals involved have stated that they were either unaware of the $10,000 limit, or didn't realize they were over it. In the current, difficult environment of U.S. Russia relations, saying "I didn't know." or "I didn't count." just feeds official suspicions.
Finally, it might be helpful if JRL readers involved in NGO work could share how they minimize using cash in transferring funds to their Russian partners or conducting exchanges outside major urban areas.